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2017-09-13 05:51:05

SFL

Ship Finance

, SDRL

Seadrill

$0.23

0.0343 (17.64%)

05:51

09/13/17

09/13

05:51

09/13/17

05:51

Ship Finance signs restructuring agreement with Seadrill

Ship Finance (SFL) announces that the company and certain of its subsidiaries have entered into a restructuring agreement in connection with a comprehensive restructuring of Seadrill (SDRL) and certain of its subsidiaries. Seadrill has filed prearranged chapter 11 cases in the Southern District of Texas together with the agreed restructuring plan. This is supported by secured lenders representing more than two-thirds of each of its secured credit facilities, approximately 40% of its bondholders and a consortium of investors. The company and three of the company's subsidiaries, who own and lease the drilling rigs West Linus, West Hercules and West Taurus to Seadrill, have also entered into the restructuring agreement. In addition to raising $1.06B of new capital, Seadrill will extend and re-profile the secured bank debt and reduce leverage. The agreement should provide Seadrill with a five-year runway and a bridge to an industry recovery. As part of the restructuring plan, Ship Finance and its relevant subsidiaries have agreed to reduce the contractual charter hire by approximately 30% for a 5-year period starting in 2018, with the reduced amounts added back in the period thereafter. The leases for West Hercules and West Taurus will also be extended for a period of 13 months until December 2024. Concurrently, the banks who finance the three rigs have agreed to extend the loan period by approximately four years, with reduced amortization in the extension period compared to today's level. The net cash flow from the three rigs in the extension period is estimated to approximately $29 million per year, or approximately $0.08 per share per quarter, net of loan interest and amortization.

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